CEO Ron Nelson, who also contributed to the round, said another $1 million has been committed and should close by the end of July.

The 13-person company is developing a technology Nelson says will allow manufacturers of long-lasting LED lights to provide better light output while slashing the cost potentially by more than half.

“We believe we have the magic formula,” Nelson said.

The funding round will be used to continue development. The company expects to return to the market later this year for a Series B round of between $4 million and $8 million, which would help build a sales team and gear up for manufacturing, which Nelson said could start sometime in the second half of 2013.

The market for LED — or light-emitting diode — lights has surged over the past four years as innovations have helped transition it from a display technology to a viable competitor to traditional household lighting sources.

LEDs emit high-intensity blue energy that, when emitted through various colored phosphors, converts to the warmer hues typical of home or office use.

The sale of LED light fixtures and replacement lamps surged 45 percent last year to $9.3 billion, according to Silicon Valley research firm Strategies Unlimited. It’s expected to continue growing the next five years.

“We can see a road map, a path, to LED efficiency getting better and better and over the next 10 to 15 years becoming the dominant lighting technology,” said Bob Steele an industry consultant and former analyst with Strategies Unlimited who tracks the LED lighting market.

But it’s still just a sliver of the overall $80 billion lighting market.

Despite LED’s promise of electricity savings from more efficient, longer-lasting bulbs, cost has proven to be a challenging barrier, especially to household consumers. LED bulbs retail typically for more than $20 apiece, compared to slightly more than $1 for traditional incandescent household bulbs.

Pacific Light’s technology, though, promises to narrow the gap for LEDs, with Nelson saying prices per bulb could drop to around $10.

Pacific Light aims to replace the use of those phosphors with “quantum dots” — chemically created microscopic semiconductors that Nelson says provide stronger output that is tuneable to different hues.

In addition to improving the color, Nelson said it will allow manufacturers to use fewer LEDs per bulb, reducing the cost of the product.

Robin Teitzel, an investor in the Oregon Angel Fund who conducted the fund’s due diligence process on Pacific Light, said five lighting industry manufacturers hold key patents into certain colored phosphors, leading to a raft of patent infringement claims. Pacific Light Technologies, he said, offers a solution to manufacturers that bypasses the use of those phosphors.

Nelson said the use of quantum dots has been a curiosity to the lighting industry for more than two decades, yet no one has been able to commercialize the technology.

Backed by Intel Capital, SpectraWatt launched in 2008 with plans to build solar power modules out of a plant in Hillsboro.

Nelson said SpectraWatt attempted to apply quantum dots to solar energy cells to improve efficiency. It didn’t pan out — the company later moved to New York, shut down in 2010 and filed for Chapter 11 bankruptcy last year.

Though market conditions were credited for the company’s demise, Nelson said the quantum dots used by SpectraWatt were moisture sensitive and didn’t adapt well to solar cells.

So SpectraWatt went about refining the process of making quantum dots under the guidance of Juanita Kurtin, the company’s vice president and head of research and development at the time who is now Pacific Light’s chief technology officer.

Kurtin helped found Pacific Light in May 2011 with the aid of the Oregon Angel Fund and, soon, a $250,000 research and development grant from the Oregon Nanoscience and Microtechnologies Institute.

In January the company acquired the quantum dot intellectual property from SpectraWatt.

The company manufactured its first quantum dots at the PSU lab last summer and has been sampling the technology with major lighting industry companies since.

“This is the holy grail of the lighting industry,” said Nelson. The industry “understands that quantum dots can have that impact.”